Emilie Prattico, Director of Strategy at BCG BrightHouse, and author of the book The New Corporate Climate Leadership, explores the new breed of leader the world needs in order to anticipate, avoid, accommodate, and recover from crises from now to 2030.
This was Then, This is Now: What kind of leadership does the climate crisis call for? by Emilie Praticco.
In the past few weeks, the volume – both by number and by resonance – of announcements made by companies on climate change seemed to signal an unprecedented shift in the private sector’s engagement to tackle the crisis. What does this tell us about the kind of leadership we can expect and the kind we need to tackle the climate crisis today and in the crucial years ahead?
Where deforestation is concerned, a coalition of public and private sector actors pledged to eliminate tropical deforestation by financing local efforts to protect and maintain standing forests. In the aviation sector, a sector not renowned for being on the “solutions” side of the climate equation, major players came together to make a net-zero commitment. A group of the world’s largest retailers – H&M Group, Ingka Group (IKEA), Kingfisher plc and Walmart came together to accelerate a movement in their industry to achieve net-zero emissions by 2050 at the latest, with interim commitments to halve emissions by 2030. For energy, several commitments were made, all amounting to a clear signal that “the end of coal is in sight,” such as The First Movers Coalition, a public-private partnership comprised of more than 30 companies with a market cap of over $8 trillion, launched to make emerging clean energy technologies accessible and scalable.
Impressive as all of this sounds, it pales in comparison to the commitment of the financial sector to deploy $130 trillion over the next three decades to decarbonize the global economy, via The Glasgow Financial Alliance for Net Zero, which represents more than 450 banks, insurers and other asset managers in dozens of countries.
Climate Crisis: Harnessing the largest companies
The scale of action, radical collaboration the likes of which we have never seen before, and the level of ambition are all unheard of and in some ways are a cause for celebration and hope. Going by standards of past COPs, and of corporate climate action to this day, this marks a clear success at mobilizing critical actors of the fight to avert the worst of the climate crisis. Indeed, at least since the Paris COP where the historic agreement was signed in 2015, one of the major stakes of the fight against climate change has been to mobilize the private sector.
Recognizing that companies hold much of the world’s resources and leverage, and are involved in most of the planet’s high-emitting activities, tackling the crisis was never going to be possible without harnessing the largest companies – and the ones in the most polluting sectors at that. Seeing what was achieved in Glasgow, then, should be one of the most positive steps we could have hoped for.
That was then, and this is now: Leadership and climate crisis
But that was then, and this is now. Between now and 2030 we must avoid unmanageable climate change by pursuing rapid and aggressive decarbonisation while also investing in resilience, meaning our capacity to anticipate, avoid, accommodate, and recover from crises. Going ahead, the features of leadership called for by the climate crisis need to go account for this – and while Glasgow was a nod in this direction, the final tally shows that companies do not have the full suite of tools to tackle climate. The path ahead will include the following:
- From tactical to transformational thinking. What is at stake is not simply a 2-degree pathway – indeed not even a 1.5 one. This is a 2015 model of thinking that undergirded the Paris Agreement but is no longer fit for purpose. It is no longer sufficient merely to be “less problematic” but rather, true leaders will proactively build the inclusive economies of tomorrow by way of “just transitions,” not just for those communities that are currently dependent on the high-carbon economy but for those who will be central to building the low-carbon economy of the 21st century.
- Imagination, and not just ambition. Having worked in the field of climate action for over a decade, I can say that the word “ambition” is probably the most used (and misused). Thinking in terms of ambition only, however, locks us into particular models when what we need is nothing less than new paradigms. Climate change is not only an environmental problem requiring scientific and technical solutions, but it also calls for cultural, economic, social, and political changes too. Leading companies will reinvent not only their emissions models, but the entire ecosystem in which they operate and that they in turn constitute.
- Cathedral thinking. The standard for leadership is reaching net zero by 2050 with clear milestones by 2030. Given that CEOs remain in post for an average of six years, there is a discrepancy between the timelines of their tenure and the timeline of climate action. True leaders need the vision to launch multi-generational and multi-stakeholder initiatives that will outlive the authority of any given individual or executive board. There is no doubt urgency but there is also the need to steadfast and persistent action even when companies are not in the spotlight, such as at a UN summit. Will the initiatives introduced at COP survive the excitement of the moment and translate into deeply entrenched action that is designed to last several decades?
- Courage and patience in a time of urgency. Leaders need to understand that building coalitions takes time; persuading colleagues and superiors to lead requires significant investments of labor and considerable persuasive ability; and that it is only ultimately worth it if a sequence is set that leads to transformation. In addition, courage is the key attribute for the new corporate climate leader – the courage to speak hard truths to colleagues and also the courage to get out of professional silos and comfort zones. There is an old adage that few conflicts are solved without engaging the combatants. Similarly, it is impossible to properly manage and ultimately solve the climate crisis without engaging and working with those countries and companies who are driving the crisis. We often hear about the urgency of the climate crisis, but most who have had the opportunity to work in this field will also tell you that without patience, we will not build the transformation we need, one that is designed to last and that is inclusive.
No doubt these features will evolve in the years to come, as the climate crisis becomes even more urgent and as new generations of leaders take the reins of facing it. One of the challenges of the predicament is that what usually takes decades or generations, from technical innovation to leadership revolutions, must occur in a matter of years. While we welcome and even celebrate companies’ joining the climate fight with pledges and commitments, we urge them to consider what deep changes will be needed not only to deliver on them, but in order to ensure that the scale, scope, and focus of their action is what the world needs.
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